U.S. Hotel Industry Asks Congress For Support - American Hotel & Lodging Association Proposes Economic Stimulus Package for Lodging Industry

Washington--Today the American Hotel & Lodging Association (AH&LA) proposed elements for an economic stimulus package that would bolster the lodging industry. "The proposals in the letter are both economically feasible and politically viable," said Jack Connors, AH&LA executive vice president for governmental affairs. "The political realities of the moment are that there is not much appetite in Congress for new spending, but some support for limited tax measures."

AH&LA proposed travel incentives, including a spousal travel tax deduction and an increase in the business meal and entertainment tax deduction; liquidity measures, including payroll tax reform and Small Business Administration loan extensions; and workforce assistance, including an extension of health insurance benefits for displaced workers.

As circumstances dictate, AH&LA will approach Congress and the Administration on other matters, such as proposed minimum wage increases, which are economically irresponsible in a period when the industry is trying to keep employees on the payroll.

AH&LA sent the following letter to all 535 Members of Congress:

October 5, 2001

The Honorable J. Dennis Hastert

U.S. House of Representatives

Washington, D.C. 20515

Dear Mr. Speaker:

First and foremost, I would like to personally thank you for your leadership during our national emergency. It has been gratifying and inspiring to see Members of Congress from both chambers and both sides of the aisle come together for the good of our country.

On behalf of the American Hotel & Lodging Association (AH&LA) and its 13,000 members, we would like to offer some suggestions to help our industry, our economy, and our country recover from the barbarous attacks of September 11.

The lodging industry is a vital component of the U.S. economy. The industry is composed of 53,500 properties with 4.1 million rooms located in every state and congressional district across the country. In 2000, the tourism sector directly supported more than 7.8 million jobs and directly or indirectly employed one of every seven Americans. Also in 2000, the tourism sector paid $171.5 billion in travel-related wages and salaries and $99.5 billion in federal, state, and local taxes.

Smith Travel Research, an independent research firm, estimates that the lodging industry lost $700 million in revenue in the 10-day period following the terrorist attacks. From September 12-18, lodging properties lost $70 million a day, and from September 19-24, they lost $40 million a day. Although we are currently seeing occupancy rates slowly climbing in some sectors of the industry and in certain regions of the country, the overall negative economic impact of the September 11 attacks continues throughout our industry and will be felt into the foreseeable future.

While the lodging industry has been negatively impacted to a severe degree, AH&LA realizes that the country's needs as a whole greatly outweigh the needs of any one specific industry. Right now, the country needs patriots, not profiteers.

Thus, AH&LA has narrowed the scope of its recommendations for a possible economic stimulus package to those that would STIMULATE the entire economy, as well as the lodging industry. Our industry is at the vanguard of all efforts to have Americans return to normal by getting the public traveling again. Our main concerns are encouraging people to travel, ensuring the liquidity of our businesses, and aiding our employees. Accordingly, we offer the following suggestions toward these ends, which Congress may wish to implement for one year or permanently. We believe these items are both economically feasible and politically viable.

TRAVEL INCENTIVES

Spousal travel

Restore the deduction for travel expenses of a spouse accompanying an employee on a business trip to 100 percent.

Business meals and entertainment

Restore the deduction allowed for business meals and entertainment to 100 percent.

LIQUIDITY

Payroll tax reform

Temporarily cut or defer federal payroll tax payments equally affecting the employer and employee contributions.

Small Business Administration loans

Extend the eligibility requirements for the Small Business Administration's Economic Injury Disaster Relief Program.

WORKFORCE ASSISTANCE

State assistance

Aid states that have difficulty processing and paying unemployment and worker compensation claims resulting from the attacks.

Health benefits

Extend health benefits for displaced workers.

A further long-term step Congress may consider to stimulate travel is to set up a temporary fund to promote travel within the U.S. and encourage international visitors to America. To achieve this, a new bureaucracy need not be created; states, cities, and convention and visitors' bureaus already have begun marketing efforts. A program disbursing federal matching funds to such entities would significantly leverage these efforts.

Please call me at (202) 289-3120 with any questions or for elaboration.

Thank you for your consideration of AH&LA's proposals. And, most of all, thank you for your service to our country.

Sincerely,

John P. Connors

AH&LA Executive Vice President for Governmental Affairs

The American Hotel & Lodging Association (AH&LA), is a 91-year-old federation of state lodging associations throughout the United States with some 13,000 property members worldwide, representing more than 1.7 million guest rooms. AH&LA provides its members with assistance in operations, education, and communications, and lobbies on Capitol Hill to provide a business climate in which the industry can continue to prosper. Individual state associations provide representation at the state level and offer many additional cost-saving benefits.

The American Hotel & Lodging Association (AH&LA), is a 91-year-old federation of state lodging associations throughout the United States with some 12,000 property members worldwide, representing more than 1.7 million guest rooms. AH&LA provides its members with assistance in operations, education, and communications, and lobbies on Capitol Hill to provide a business climate in which the industry can continue to prosper. Individual state associations provide representation at the state level and offer many additional cost-saving benefits.